Author Question: Which of the following is an example of a how much decision? A) The Zhous have demolished their ... (Read 30 times)

robinn137 · **on:** Jun 29, 2018

Which of the following is an example of a how much decision?

A) The Zhous have demolished their old home and are debating whether to build a ranch-style house or a Craftsman home.
B) The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows.
C) You're planning to hold a graduation party and must decide between having your party catered or having a pot-luck.
D) Chelsea has withdrawn from the swim team to take a full-time job.

Question 2

Name three determinants of elasticity identified in the text. Explain how each one affects the responsiveness of demand.

What will be an ideal response?

yeungji · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

(1) Availability of substitutes. Where fewer substitutes are available, demand will tend to be more inelastic. (2) The importance of being unimportant. Where an item represents a smaller portion of a total budget, demand will tend to be more inelastic. (3) The time dimension. The greater the time available to adjust behavior, the more elastic demand tends to be.